The Charging Bull statue on Wall Street in New York. Yonhap News Agency

Despite ongoing debates about a bubble in the artificial intelligence (AI) sector, a majority of major global asset management firms anticipate that the global stock market will continue its bull run next year, Bloomberg reported on the 7th (local time).

According to the report, 30 out of 37 global asset managers from the United States, Europe, and Asia, who responded to a Bloomberg interview, maintained a risk-on view for their 2026 market outlook.

Four management firms offered mixed outlooks, while only three expressed a risk-off sentiment.

The majority of asset managers believe that resilient global growth, further advancements in AI, accommodative monetary policies, and fiscal stimulus measures will sustain the strength of the global stock market.

Silvia Sheng, Global Multi-Asset Strategist at J.P. Morgan Asset Management, stated, "Expectations for solid growth and accommodative monetary and fiscal policies are supporting a risk-on stance in our multi-asset portfolios. We maintain our overweight view on equities and credit assets."

David Bianco, Chief Investment Officer for the U.S. at asset manager DWS, said, "We are riding the current strong (stock market rally) trend. We are not contrarian investors right now."

Contrarian investing is a strategy that differs from trend-following; it involves selling stocks when most people are buying and buying stocks when most people are selling.

The optimism among many asset management firms comes amid ongoing discussions about a potential bubble in the AI sector.

Some on Wall Street are warning that the steep stock market rally, particularly centered on AI-related industries, has brought the New York Stock Exchange to a state similar to just before the dot-com bubble burst in 2000.

Warnings also persist about the possibility of a recession in the U.S. economy next year due to the impact of the Donald Trump administration's tariff policies and ongoing geopolitical tensions.

Conversely, while acknowledging risk factors in next year's market environment, many fund managers believe that the warnings of an AI bubble or recession are somewhat exaggerated.

Bloomberg reported that 85% of the surveyed asset managers responded that the valuations of the "Magnificent Seven" (M7) and other leading AI-related stocks are not excessively high.

In fact, the price-to-earnings ratios of the technology sector in the New York Stock Exchange have recently remained only slightly above their 10-year average, Bloomberg noted.

This is because, unlike during the dot-com bubble era, major tech stocks such as Nvidia, Google, Microsoft (MS), Amazon, Apple, Tesla, and Meta continue to generate substantial profits that exceed market expectations.

Anwiti Bahuguna, Co-Head of Global Asset Allocation at Northern Trust Asset Management, diagnosed, "We are seeing technology companies delivering earnings that beat expectations, and we can't call this a bubble."

Asset managers expect the stock market rally to extend beyond the U.S. to Asian markets, including South Korea, and European markets next year.

Andrew Hiscox, Equity Strategist at Wellington Management, assessed, "We are starting to see a meaningful expansion of earnings momentum across regions, including Japan, Taiwan, and South Korea. Looking ahead to 2026, the potential for a resurgence in earnings growth is clearly visible in Europe as well as a broader range of emerging markets."

Alexandra Wilson-Elizondo, Co-Chief Investment Officer at Goldman Sachs Asset Management, commented, "The Korean stock market has been re-rated, and we see potential for a similar market re-rating in India in 2026."

Yonhap News Agency